Mortgage rates have hit an all time low, you as a prospective buyer need to do your homework to lock in the best rate that will fit within your goals for financial planning. Follow the steps below and you could be well on your way to finding a home loan and becoming a proud first time home owner.

The Better Business Bureau (BBB) suggests taking the following steps when looking to purchase a new home:

1. Know what you can afford as a down payment. This will determine the amount you will end up paying over the life of the loan. The last thing you want to do is not be able to make the payments, do your homework. There are many devices on the internet that will allow you to figure out your monthly payment that works with your budget.

2. As the potential buyer you have the right to talk to as many lenders as you feel. You need to consider lenders who will suit what your needs are. Do not let them use high pressure sales tactics. Be sure that you are aware of the types of home loan lenders by doing your homework.

3. Have potential lenders explain the different types of home loans available to you and carefully go over the differences between each. Find out the total cost of the loan. This will include interest rates, points, and other fees. As a potential home buyer you can ask about a Good Faith Estimate. This will show you the loan and settlement charges. Follow these steps before you agree or pay any types of fees. Ask what fees will be returnable should you decide against following through on the loan agreement.

4. Remember there are other fees that are included in the home loan. These include homeowners' insurance and property taxes. If it is a brand new home these taxes may be higher than what you would expect. So make sure that you ask questions.

5. Make sure you ask for clarification on charges you don't understand. Make sure that you fully understand what you are signing. It is your right when applying for a home loan to read each page of the agreement before signing it. It doesn't matter if you take hours. Ask questions if something is unclear. Do not assume you know the answer.

6. Get a prequalification letter, this provides an estimate as to how much you can afford. A home loan lender will also give you a preapproval letter. This basically gives the buyer a provisional commitment from the lender. It shows the seller and the real estate agent that you are serious.

Use these steps provided by the BBB, and they will help show a potential seller or agent that you want the home, and are willing to take the financial risk. Ensuring that you know what you can afford keeps you from being spread to thin, thus risking default or foreclosure.